Tax efficient gift giving

21 December 2011

Giving to your team

• Christmas celebrations at your work on a working day are likely to be exempt from FBT.
• Keep the cost of celebrations below $300 per person to ensure the event is a minor benefit for FBT purposes and exempt from FBT (including meals, beverages, entertainment, etc.,).
• Keep any Christmas presents below $300 per person and ensure they are ‘one-off’ gifts.  They need to be ad-hoc to be exempt from FBT.
• You can’t deduct the cost of your Christmas celebrations for team members unless FBT applies. 

Clients and Christmas

• Entertaining your clients at Christmas is not tax deductible. Sorry.
• Give a gift instead – gifts are deductible as long as the gift is given by the business with the expectation that the business will benefit (i.e., the gift is given with the expectation of generating revenue).

 

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